Australia – is our democracy for sale?

Australians are becoming more aware of the dangers of political parties chasing more
frequent contributions from donors and of uncontrolled spending in election campaigns. The media regularly reports on government decisions that favour the interests of companies that fill the coffers both of the parties in power and the often-compliant opposition parties.

Electoral funding is crucial to our democratic processes. The Greens’ research on political donations during the past six years and our participation in various forums on donations and electoral funding has led us to the conclusion that radical reform is needed.

Further, a number of leading members of both major parties have spoken of the need for
changes to political party funding: Paul Keating, Carmen Lawrence, Eric Roozendaal (NSW government minister) and Don Harwin (NSW Upper House Liberal Whip) have all voiced their concerns.

So it was disappointing that in the recent federal election campaign the issue of
political donations was ignored by the major parties. These parties were busy handing out our money in the hope of winning more votes. The Greens raised concerns about rampant fund raising by the major parties for their expensive campaigns and lack of transparency in that process. But unfortunately the issue was lost in the vote buying ritual of our elections.

During the federal election the Greens called for a national summit on political
donations to explore all options for reforming electoral funding. Unlike the Coalition parties, Labor has a history of supporting reform in this area. With Labor in power, a Rudd government would be wise to call such a summit.

The key issues that such a summit would cover include transparency of donations to
political parties, capping of donations and electoral expenditure, and the role
for private donations to political parties.

Transparency of donations is a hot topic as the Howard government’s change to the disclosure threshold of donations effective 8 December 2005 has been disastrous.

Prior to that date, all donations of $1,500 and above to registered parties had to be
reported to the Australian Electoral Commission (AEC) every financial
year. After that date the disclosure threshold rose to over $10,000 adjusted each year to the CPI. The current disclosure threshold is $10,500.

This means that thousands of donations accounting for millions of dollars are now
never disclosed to the public. This secrecy is dangerous in any democracy since the public must be aware of who is paying to potentially influence governmental policies.

It is true that there have been major problems with transparency due to loop holes
in the federal disclosure laws for years, but what the Howard government did in
December 2005 was about securing more funding by allowing their backers to give
large donations secretly.

Capping of donations and expenditure is important since currently we are on our way to
an American system of big money politics where the only way to be elected is to
buy your way into office. Other countries have capped the amount of money that can be given to political parties, as well as the amount spent on election campaigns, such as Canada.

The following are the three main issues that need to be considered at a national summit. Under each of these issues we have given recommendations we believe would lead to a more transparent electoral system that will not be dominated by a quest for larger
and larger donations from groups that stand to benefit from access to our
political leaders:

Transparency

Restore the donations disclosure threshold to the main offices of the political
parties to $1,500.

Require all donations reported by the political parties to the AEC to include
information so donors can be adequately identified.

Ensure the purpose of all money received by political parties is clearly stated on their returns.

Provide the AEC with adequate powers and resources to enforce full disclosure by parties and donors.

Set up a continually updated website disclosing all money received by political parties to the AEC.

Ban all donations from individuals who are not either Australian citizens or permanent residents.

Capping of Donations and Election
Expenditure

Cap the amount spent in all electorates in each election and also cap the money spent by head offices of the parties.

Cap third party expenditures during an election.

Limit the amount a candidate can use of his/her own money in their campaigns.

Role of Private Donations to
Political Parties

Canada has banned all donations to parties from corporations, unions and other organisations. Canadian law only allows capped donations from individuals. We must consider such a step in Australia since it removes the possibility of buying influence by large companies, unions and organisations such as lobby groups.